According to the announcement, clean hydrogen is an essential part of a clean energy economy that can strengthen energy security, bolster domestic manufacturing, create healthier communities, and deliver new jobs and economic opportunities across the nation.  Collectively, with help from this funding, the hubs aim to produce more than three million metric tons of clean hydrogen per year, achieving nearly one third of the 2030 U.S. clean hydrogen production goal.  Also according to the announcement, the seven hubs are expected to eliminate 25 million metric tons of carbon dioxide emissions from end uses each year—an amount roughly equivalent to combined annual emissions of over 5.5 million gasoline-powered cars.  DOE referred to this announcement as one of the largest investments in clean manufacturing in history. 

The announcement took place in Philadelphia, Pennsylvania which will be the location of the Mid-Atlantic hub and where hydrogen will be produced from renewable energy and nuclear power.

The following lists the seven selected hub locations:

• An Appalachian hub, located across West Virginia, Southeastern Ohio, and Southwestern Pennsylvania – this hub will be the one largest in terms of production and derive hydrogen from the region’s methane gas;
• A California hub that will span the state and encompass the ports of Long Beach, Los Angeles and Oakland;
• A Gulf Coat hub, based in Houston, Texas that could eventually expand to include parts of Louisiana, which will derive hydrogen from methane gas and renewable energy;
• A Mid-Atlantic hub, including parts of Pennsylvania, New Jersey, and Delaware – which will produce hydrogen from renewable energy sources and nuclear power;
• An upper Midwest hub – the Heartland Hydrogen hub – spanning Minnesota, North Dakota and South Dakota, which will derive hydrogen from wind energy and will be used for agriculture and power;
• A second Midwest Hydrogen hub will span parts of Illinois, Indiana and southwest Michigan and will be derived mostly from nuclear power;
• And a Pacific Northwest hub will span parts of Eastern Washington and Oregon as well as parts of Montana and will focus on hydrogen for freight and agriculture.

While officials said they are still determining exact locations for the hubs in each region, each is a mix of private sector groups and state governments.  The initiative is expected to generate more than $40 billion in private sector funds.  DOE now plans to finalize negotiations with the awardees.

Other key takeaways about this announcement include the following:

• This is the largest award that DOE has made to date under the IIJA, and the "hub" model is a novel approach for DOE to support.  Additionally, the “hub” model involves a long-term horizon—proceeding in phases that will extend over a decade.
• The hubs are comprised of public/private partnerships, including a wide range of organizations that may not have extensive prior experience working together – such as academia, major fossil fuel companies, government agencies, energy start-ups, national laboratories, and labor unions.  Success of the hubs will therefore require strong and organized project management.
• Relatedly, a number of entities will be participating in multiple hubs.  This may promote increased exchanges of best practices and lessons learned.
• Given the large number of members in many of the hubs, it seems likely that not every entity will receive federal funding.  However, participation in a hub provides entities with a seat at the table in the development of a hydrogen fuel economy.
• Those entities that accept DOE funding will likely face the “strings” associated with federal funding for infrastructure projects, including most notably Buy America requirements.
• Many of the hubs indicate that they are still open to new members, which offers those who were participants on proposals that were not selected a further opportunity to participate in one or more hydrogen hubs.

For more information, please contact Amy Roma, Partner, Mary Anne Sullivan, Senior Counsel, James Wickett, Partner, or Stephanie Fishman, Associate.